It’s no secret younger crowds are steering away from traditional banking and demanding more innovative approaches instead. In the most recent issue of the Texas Banking magazine, TBA Chairman Ford Sasser stressed the importance of having younger generations understand the value of basic banking principals.
Since the evolution and rise of peer-to-peer (P2P) platforms like Venmo, Zelle, Paypal and CashApp, they have become a common form of payment among younger generations due to their conveniency and quickness. While these P2P platforms may be quick and easy to use, they are a security risk since they are not regulated like banks. With today’s digital climate, cybersecurity is a large concern — and these P2P companies are often targeted by hackers. In fact, many Google suggestions state “call your bank” if your Venmo account has been hacked. It seems contacting your bank has become the last resort rather than it being the first step when it comes to managing finances. Why is that?
In a piece written 50 years ago in September 1972, Alan B. Gilman, a former chairman of the board for Sanger-Harris in Dallas, wrote an article called, “The Youth Market and Banking,” for Texas Banking (formerly named Texas Bankers Record), where he breaks down the issue between younger demographics and banking. Ironically, it’s still a pressing issue today.
As fast as times have changed in the past, the future will change even faster.”
— Alan B. Gilman, Texas Bankers Record, September 1972
Gilman begins the piece by explaining that the mission of a business enterprise is to generate profitable growth, regardless of industry type. However, every enterprise has a life cycle. He explains when it’s young, there’s fast growth and lots of room for adventure. When it’s mature, that typically means it’s conservative, over-structured and rigid — like banks, for example. Gilman then compares department stores like John Wanamaker Department Store and Marshall Field and Company, to Sears and JCPenney.
Wanamaker and Marshall Field were once dominating the department store industry until the institutions suffered what Gilman calls “the pains of mature institutions.” They were popular in urban areas until newer stores like Sears and JCPenney arrived, as well as other discount stores. The once popular department stores immediately felt the pressure, then conformed to a forced, new image of meeting “all things to all people.” However, the competition offered both good value and conveniency in a casual manner from the start. By the mid-1960s, the once popular department stores were practically eroded. Sears and JCPenney only became bigger and more attractive, as well as began rolling out an easy payment method with store credit cards.
Gilman stresses the importance of what he calls imaginative planning:
“The communication of one’s self requires the disciplines of planning who you are and what you want to be, or you will project what you were. Our metamorphosis, which is a continuing project, involves department by department analysis of content, program and talent. It requires imaginative planning for change. It requires a permissive atmosphere with great freedom of expression. It means exciting displays, creative merchandise activity, high standards of expectation and really important stress on future planning. To communicate an image to a customer requires first the development of an image inside and then the need to train an organization in the skills of the professional projection to extend that image to the customer.”
He then notes times are rapidly changing technologically and sociologically, which are still very true today. Gilman mentions the effects mass communication such as media and television have on people. An effect being changing how consumers see themselves or want to see themselves — which is “young.” According to Gilman, being young is no longer a certain age we all wish we could go back to — rather, it’s a state of mind. He defined it as anybody young enough to still be alive can be categorized under what he calls the “youth market.”
Gilman said the key ingredient in understanding the real importance of the youth market is understanding it’s not an age, it’s a state of mind most responsible for the change in the taste-making force of this economy. Change happens outside of enterprises, but it’s up to those enterprises to keep up to thrive. He said, “As fast as times have changed in the past, the future will change even faster.”
How does this pertain to bankers? To Gilman, “it clearly points out the significant impact of change as an opportunity to generate plus volume and profit. The key to change is in the desire to understand it and relate to it as a vehicle for growth.”
This all goes back to how Sears and JCPenney quickly took over the leading spot once held by popular department stores like John Wanamaker and Marshall Field and Company. Times change in every industry, and enterprises must quickly get in front of those changes before they even arrive, or risk getting left in the dust. As today seems to be more of a changing world than ever before due to technological and sociological advances, it’s crucial banks keep up with consumers, or as Gilman called it — the “youth market.”